New oil production technology is testedWASHINGTON, Dec. 6 (UPI) -- A technology developed with U.S. Department of Energy funding has revived oil production in two abandoned oilfields on Osage Indian tribal land in Oklahoma.

Officials say the technology can potentially add billions of barrels of additional domestic oil production in declining fields.

The Department of Energy said production has jumped from zero to more than 100 barrels of oil daily in the two Osage County, Okla., fields, one of which is more than 100 years old.

That success suggests the method might be able to revitalize thousands of other seemingly depleted U.S. oilfields.

The new technology, initially proposed by Grand Resources Inc., an independent oil producer based in Tulsa, Okla., involves the use of horizontal well waterflooding.

Government officials said the United States has more than 218 billion barrels of by-passed conventional oil lying at shallow depths in tens of thousands of declining or depleted reservoirs. If the new technology could tap even 1-10th of that by-passed oil, officials say it would roughly double the nation's proved crude oil reserves.

Stanford Ovshinsky may not be a household name, but his inventions have the power to change the world

“THE ages of mankind have been classified by the materials they use—the Bronze Age, the Iron Age, the Age of Silicon. We are at the dawn of the Hydrogen Age.” So proclaims Stanford Ovshinsky, co-founder of Energy Conversion Devices/ENER, a company based near Detroit, Michigan. “What is more,” he says, “the hydrogen economy is happening already.”

There have been plenty of grandiose but unsubstantiated claims made over the past five years about the potential for hydrogen to replace fossil fuels as an energy carrier, so some scepticism is certainly in order. In particular, President George Bush and the big carmakers have been trumpeting hydrogen fuel cells—electrochemical devices that turn hydrogen into electricity and water vapour—as the replacement for the internal-combustion engine. But the date of commercialisation seems forever slipping just beyond the horizon.

That has prompted a backlash from advocates of rival technologies (such as ethanol-based engines and novel batteries) and from greens, who argue that hydrogen is just a cynical long-term diversion used by Mr Bush and Detroit to avoid short-term action on fuel-economy standards, plug-in hybrids and other here-and-now options. And yet here is Mr Ovshinsky, still trumpeting hydrogen's virtues despite bitter opposition.

Three things set Mr Ovshinsky apart from the hydrogen hypesters. First of all, he is no newcomer. He first outlined his vision for what he calls a “hydrogen loop” some five decades ago as an alternative to fossil fuels. (The loop goes from water to stored hydrogen via solar-powered electrolysis, and from hydrogen back to water, generating electricity in the process, via a fuel cell.) Unlike others, he can hardly be accused of opportunistically seizing upon this obscure techno-fix for political reasons.

The second difference is that Mr Ovshinsky's green credentials are impeccable. He and his wife Iris, who died recently, founded ECD in 1960 with the explicitly stated goal of “using creative science to solve societal problems”. Astonishingly, they had the foresight to predict—long before the oil shocks of the 1970s—that the world's addiction to oil would have unacceptable side effects, from resource wars to climate change. Spend time with Mr Ovshinsky and his employees, and it becomes plain that his social values permeate his organisation.

But what lifts Mr Ovshinsky into the league of genius inventors is something rather less common: success. He is the inventor of the nickel-metal hydride (NiMH) battery, which is used to power everything from portable electronics to hybrid cars; around 1 billion such batteries are sold every year. He has also made advances in information technology (he calls information “encoded energy”) and holds critical patents relating to thin-film solar cells, rewriteable optical discs, a new form of non-volatile memory and flat-panel displays. These technologies are being commercialised through deals with Intel, Samsung, STMicroelectronics, General Electric, Chevron, United Solar Ovonic, and others.

Innovation from disorder

What all these apparently disparate inventions have in common is that they rely on Mr Ovshinsky's path-breaking discoveries in the field of disordered or “amorphous” materials, since named “ovonics” in his honour. Such materials can be used for energy generation (in fuel cells and solar cells), for energy storage (in batteries), for computing (to store data on discs or in chips) and to create custom materials with novel properties.

Mr Ovshinsky has spent the past five decades devising actual working products, based on amorphous materials, that fill every niche in his hydrogen loop, from thin-film solar panels to solid-hydrogen storage tanks to “regenerative” fuel cells that can store energy captured while a car is braking. ECD has even “hacked” a Toyota Prius hybrid car so that it runs on pure hydrogen rather than petrol, which he says proves that “we don't have to wait for fuel cells to move into the hydrogen economy.”

All this makes it tempting to compare ECD's co-founder with Thomas Edison, the great inventor from another age who founded General Electric. Both established themselves early on not only as brilliant innovators, but inventors with their feet firmly planted on the ground. Both arose from humble roots: Edison was not born to privilege, while Mr Ovshinsky's father collected scrap by buggy. Mr Ovshinsky did not even go to college, and credits his vast knowledge of science to the public libraries of his native Ohio. He likes to say, “invention comes to the prepared mind.” And Edison, like Mr Ovshinsky, straddled the fields of energy and information technology: he originally made his name with the invention of the quadruplex, a device that increased the capacity of telegraph lines, before moving on to electrification.

Another similarity between the two inventors is that both thought of their inventions as entire systems. They had the verve to envisage a radically different world, but were good at inventing the practical things needed to get there. In Edison's case, his vision was that of mass electrification. He was not the first to make a light bulb, but he vastly improved it and, more importantly, created the generation and distribution technologies needed to make it work, from power stations to electricity meters. His company, now called GE, helped to light up America and then the world.

Despite his lack of formal training, the charming, soft-spoken Mr Ovshinsky is not at all threatened by scientists with fancy degrees: he hires many of them, and has hosted lively debates around a round table at ECD with such prominent scientists as Hellmut Fritzsche and Morrel Cohen of the University of Chicago, David Adler of MIT and Sir Neville Mott of Cambridge University (who went on to win a Nobel prize for work on amorphous materials). Ask him whether he expects his own Nobel, and he responds matter of factly: “Oh, never. I've been nominated before, and Mott gave me credit when he won his, but I'll never get one.” Without a hint of bitterness he adds softly, “I'm not a part of their world.”

Mr Ovshinsky's vision for a hydrogen loop was just a blackboard exercise five decades ago. But since then he has produced the inventions needed to make it work. “Stan starts with a vision, and then goes out to invent what we need to get from here to there,” says Joachim Doehler, a senior scientist at ECD. Doing this requires more than scientific theory: it requires a practical engineer's mind too. “Stan is a very good toolmaker,” says Robert Stempel, ECD's chairman (and a former boss of General Motors, a big carmaker). Mr Ovshinsky's collaborators say that he has an astonishing ability to juggle the permutations of eight or ten novel materials in his head, which gives him an intuitive grasp of which scientific leads to follow. That said, his colleagues joke, he still sometimes cannot remember names correctly.

“Mr Ovshinsky may be 84, but he still dresses in natty suits and moves with a young man's energy.”

The best evidence of Mr Ovshinsky's systems approach at work is his shiny new solar factory in Michigan. Several decades ago, he argued that solar panels ought to be made not as brittle crystalline panels in costly batch processes—how everyone else does it today—but in a continuous process, “by the mile”. He was ridiculed. But he refused to yield, and asked his team to devise processes for producing miles of thin-film solar material. Dr Doehler, a veteran of AT&T's legendary Bell Labs research centre, recalls telling his boss it was impossible. The boss proved him wrong, personally designing much of the solar factory from scratch. Crucially, his approach does not require the expensive silicon used in conventional solar panels.

A sunny future

Mr Ovshinsky points to the happy result on the shop floor: a flexible, self-adhesive strip of solar material that makes power even on cloudy days and is virtually indestructible. The factory, which Mr Bush visited in February, has an order backlog of six months and profit margins approaching 30%, he says. He has another factory in the works nearby, and plans for more: “I see ECD's future as a factory for factories. That's how you build entirely new industries for the future.” So does he see ECD as the GE of the 21st century? “Oh, ECD will be much more than that,” says Mr Ovshinsky merrily. “Energy and information are the twin pillars of the global economy, after all.”

How justified is this boast? Few question his intellect, but some do challenge his record as a corporate boss. An article in Forbes magazine asked in 2003 why investors “keep giving money to Stan Ovshinsky, the inventor who can create anything but profits.” ECD has lost money for most of the 40-plus years that it has been a public company. As even one of Mr Ovshinsky's loyal lieutenants confesses, “This company would have gone bust six times already if it were not for the personal loyalty people felt for Stan and Iris; we went the extra mile for them because this place is unique.”

Inspired by the family's links to the peace and civil-rights movements, the Ovshinsky motto is “with the oppressed, against the oppressor”, and ECD retains the feel of a family firm with those values. What is more, ECD is visibly committed to clean energy—and Mr Ovshinsky is clearly not motivated by money. The New York Times recently analysed executive pay in America and found that bosses typically get 500 times the salary of the average worker at their firms; the ratio at ECD is five to one. He even points out that he is “probably the only chief executive that is a union member”.

The loss of his wife, collaborator and co-founder has clearly devastated Mr Ovshinsky, but do not expect to see him retire anytime soon. He may be 84, but he evidently has plenty of unfinished business to attend to. He still rises early, dresses in natty suits, and moves with the agility and energy of a young man. His intellectual curiosity appears entirely undiminished by a life of learning: his desk at ECD is buried under neat stacks of annotated scientific papers, business plans and other reading material. And he remains as audaciously inventive as ever.

He has worked out how his next generation of solar films will be produced not at 2.5 feet per minute, he says, but 100 times faster. He is convinced he can radically improve the efficiency of fuel-cell electrodes. He thinks he will be able to scale up his firm's hydrogen-storage system to megawatt scale, thus enabling grid storage of renewable power. And so on. As your correspondent departed at the end of a day-long visit, Mr Ovshinsky still had a dinner interview with a television crew, and then planned to work on a cosmology paper at home. As I.I. Rabi, a Nobel prize-winning physicist, is reported to have said when asked if his friend was another Edison: “He's an Ovshinsky, and he's brilliant.”

QUZHOU, China — Foreign businesses have embraced an obscure United Nations-backed program as a favored approach to limiting global warming. But the early efforts have revealed some hidden problems.

Emissions from a factory in Qu- zhou match those of a million cars.

Under the program, businesses in wealthier nations of Europe and in Japan help pay to reduce pollution in poorer ones as a way of staying within government limits for emitting climate-changing gases like carbon dioxide, as part of the Kyoto Protocol.

Among their targets is a large rusting chemical factory here in southeastern China. Its emissions of just one waste gas contribute as much to global warming each year as the emissions from a million American cars, each driven 12,000 miles.

Cleaning up this factory will require an incinerator that costs $5 million — far less than the cost of cleaning up so many cars, or other sources of pollution in Europe and Japan.

Yet the foreign companies will pay roughly $500 million for the incinerator — 100 times what it cost. The high price is set in a European-based market in carbon dioxide emissions. Because the waste gas has a far more powerful effect on global warming than carbon dioxide emissions, the foreign businesses must pay a premium far beyond the cost of the actual cleanup.

The huge profits from that will be divided by the chemical factory’s owners, a Chinese government energy fund, and the consultants and bankers who put together the deal from a mansion in the wealthy Mayfair district of London.

Arrangements like this still make sense to the foreign companies financing them because they are a lot less expensive, despite the large profit for others, than cleaning up their own operations.

Such efforts are being watched in the United States as an alternative more politically attractive than imposing taxes on fossil fuels like coal and oil that emit global-warming gases when burned.

But critics of the fast-growing program, through which European and Japanese companies are paying roughly $3 billion for credits this year, complain that it mostly enriches a few bankers, consultants and factory owners.

With so much money flowing to a few particularly lucrative cleanup deals, the danger is that they will distract attention from the broader effort to curb global warming gases, and that the lure of quick profit will encourage short-term fixes at the expense of fundamental, long-run solutions, including developing renewable energy sources like solar power.

As word of deals like this has spread, everyone involved in the nascent business is searching for other such potential jackpots in developing countries.

As for more modest deals, like small wind farms, “if you don’t have a humongous margin, it’s not worth it,” said Pedro Moura Costa, chief operating officer of EcoSecurities, an emissions-trading company in Oxford, England.

The financing of the chemical factory’s incinerator here and other deals like it are now drawing unfavorable attention. Canada’s environment minister, Rona Ambrose, announced in October that her government would withdraw from the trading program.

“There is a lot of evidence now about the lack of accountability around these kinds of projects,” she said.

Another concern is that the program can have unintended results. The waste gas to be incinerated here is emitted during the production of a refrigerant that will soon be banned in the United States and other industrial nations because it depletes the ozone layer that protects the earth from ultraviolet rays.

Handsome payments to clean up the waste gas have helped chemical companies to expand existing factories that make the old refrigerant and even build new factories, said Michael Wara, a carbon-trading lawyer at Holland & Knight in San Francisco.

Moreover, air-conditioners using this Freon-like refrigerant are much less efficient users of electricity than newer models. The expansion of large middle classes in India and China has led to soaring sales of cheap, inefficient air-conditioners, along with the building of coal-fired plants to power them, further contributing to global warming and the depletion of the ozone layer.

The program is at the forefront of efforts to address the most intractable problem in climate change: how to limit soaring emissions from the largest developing countries. Sometime in 2009, China’s total emissions of carbon dioxide, the most important global warming gas, are expected to surpass those from the United States, according to the International Energy Agency.

=========

(Page 2 of 2)

While the challenge of addressing global warming is daunting, so are the consequences of inaction. Scientists warn that rising concentrations of carbon dioxide and other global warming gases could result in more severe storms, wide crop failures, the spread of tropical diseases and rising sea levels endangering some coastal cities.

Programs like the one the United Nations supports are increasingly common in Europe. In general, they allow companies to buy rights on the market to exceed their limits on global warming gases from other companies prepared to reduce emissions elsewhere at a lower cost. Many economists consider emissions-trading systems, which are driving participants to the cheapest cleanups with the biggest impact, as the most efficient way to address pollution.

But a study commissioned by the world organization has found that the profits are enormous in destroying trifluoromethane, or HFC-23, a very potent greenhouse gas that is produced at the factory here and several dozen other plants in developing countries. The study calculated that industrial nations could pay $800 million a year to buy credits, even though the cost of building and operating incinerators will be only $31 million a year.

The situation has set in motion a diplomatic struggle pitting China, the biggest beneficiary from payments, against advanced industrial nations, particularly in Europe. At a global climate conference in Nairobi, Kenya, in November, European delegates suggested that in the case of Freon factories now under construction in developing countries, any payments for the incineration of the waste gas should go only into an international fund to help factories retool for the production of more modern refrigerants that do not deplete the ozone layer.

But the Chinese government blocked the initiative, insisting that money for Chinese factories go into the government’s own clean energy fund. Negotiators ended up setting up a group to study the issue.

Even as hundreds of millions of dollars from the program are devoted to the refrigerant industry, countries in sub-Saharan Africa, which were originally envisioned as big beneficiaries of emissions trading, are receiving almost nothing. Just four nations — China, India, Brazil and South Korea — are collecting four-fifths of the payments under the program, with China alone collecting almost half.

Two-thirds of the payments are going to projects to eliminate HFC-23.

Those payments also illustrate conflicting goals under Kyoto and the Montreal Protocol, a 1987 agreement that requires the phasing out of ozone-depleting substances. The problem is that the trading program backed by the United Nations, known as the Clean Development Mechanism, is helping support an industry that another international organization is trying to phase out.

And while ozone depletion is a separate problem from global warming, some gases, like HFC-23, make both worse. The separate secretariats under the protocols have little legal authority to resolve this quandary.

“It’s tricky in that we don’t have a mechanism other than the Security Council, and who cares there about HFC’s?” said Janos Pasztor, the acting coordinator of the organization that oversees the program.

In the end, officials say, there should be more projects aimed at providing renewable energy and sustainable economic development for the world’s poorest people.

“If people only do HFC-23 projects, then they miss the whole idea,” Mr. Pasztor said.

Richard Rosenzweig, chief operating officer of Natsource, a company in Washington arranging emissions deals between poor and rich countries, said it was not fair to look only at incineration costs and compare them with the size of payments from industrial nations. The administrative costs of the program are high, he said, and at least disposal of the waste gas is taking place.

If the world tried to reduce emissions through an outright ban or regulation alone, as many environmentalists recommend, it might not happen at all, he said. The United Nations-favored program may have flaws, he added, but “it’s a pilot phase — this is a 100-year problem.”

Environmental groups say that governments in developing countries should either require factories to incinerate the waste gas as a cost of doing business, or receive aid from wealthier countries to cover the relatively modest cost of incinerators.

“Couldn’t we pay for the cost, or even twice the cost, of abatement and spend the rest of the money in better ways?” Mr. Wara asked.

DuPont produces HFC-23 as part of its output of Teflon, but has routinely burned the colorless, odorless waste gas without compensation for many years, even though it is not required by law to do so, a DuPont spokeswoman said.

The secretariat of the Clean Development Mechanism estimates that a ton of HFC-23 in the atmosphere has the same effect as 11,700 tons of carbon dioxide. James Cameron, the vice chairman of Climate Change Capital, which organized the chemical factory deal here, said there were considerable costs and risks in setting up plans that required elaborate certification by consultants, acceptance by developing-country governments and approval by a United Nations secretariat.

For small projects involving less than $250,000 worth of credits, fees for deal makers, consultants and lawyers can far exceed the cost of installing equipment to clean up emissions.

Even the Chinese government, the main seller of carbon credits and a defender of the program, is expressing some misgivings.

“We do not encourage more HFC projects,” a statement by Lu Xuedu, deputy director of the Office of Global Environment Affairs at the Ministry of Science and Technology, said. “We would prefer to have more energy efficiency and renewable-energy projects that could help alleviate poverty in the countryside.”

But for now, the projects involving industrial gases like HFC-23 are where most of the action is.

“You can do those quickly,” Mr. Rosenzweig of Natsource said, “and it’s worth the investment.”

Michael Nagle/Getty ImagesGenomics pioneer Craig Venter at the American Museum of Natural History on March 12, 2006SummaryA new alternative fuel technology backed by oil supermajor BP would use microscopic organisms to produce methane from carbon dioxide. If the technology proves successful, it could have consequences for countries like Russia, which have large natural gas deposits and thus are massively influential in the current global energy market.

AnalysisA new alternative fuel technology, backed by oil supermajor BP, could begin to make a dent in the world’s dependence on traditionally sourced natural gas. Most importantly, it could affect the geopolitical dominance of countries like Russia, which have large deposits of natural gas and therefore a major foothold in the current global energy market. The technology is not a sure bet; more work needs to be done to make it commercially viable. Still, it is instructive to look at the geopolitical effects such a technology could have.

The new alternative fuel technology would produce methane (also known as natural gas) from carbon dioxide (CO2) using microscopic organisms, or microbes, that eat CO2 and produce methane as waste. The technology is based on advancements in both genomics and microbiology and is being propelled by U.S. geneticist Craig Venter, most noted for his work on sequencing the human genome. Venter claims that in 18 months his research company, Synthetic Genomics, will be able to produce this nontraditional source of natural gas, but only time will tell how cost-effective this new technology will be in comparison to traditionally sourced natural gas.

The implications of this technological advancement are vast. For one thing, it would provide a new alternative to drilling for natural gas deposits in the ground. Natural gas pockets are finite in number and costly to find — not to mention the cost of extracting and transporting the natural gas to consumers. With the new technology, microbes would be able to produce methane from CO2 in specific quantities wherever it was needed.

From an environmental and policy standpoint, this means that a cleaner-burning fuel could be made by harnessing a greenhouse gas. Furthermore, the explosive hazards associated with pipelines or the shipping of natural gas in liquefied form — which are large inhibitors of natural gas expansion in places like the United States — could largely be abated.

From a geopolitical standpoint, the technology could begin to change the global geopolitical energy balance. Russia is the world’s largest natural gas exporter. As recent events in Ukraine and Europe have shown, Russia takes this power seriously and often uses it as a political lever to ensure Moscow gets what it wants. Europe is already beginning to diversify its natural gas imports — including building new pipelines to places such as Libya and building new import terminals so Europe can accept more liquefied natural gas. Imagine if European countries began to produce their own natural gas and slowly end their tumultuous reliance on Russian energy sources. The new technology could also begin to affect other natural gas exporting states such as Qatar, Algeria, and Indonesia, thus beginning to change the balance of power in those regions.

This energy advancement is not the rogue project of a single mad scientist. BP backs Venter’s firm, and Venter is not the only geneticist using genetic manipulation with the aim of creating organisms that will produce fuel. Nonetheless, there are many steps between here and there, leaving plenty of room for other researchers and corporate backers to compete. These steps include:

Capturing CO2 in a large enough quantity to produce usable amounts of methane; Producing the microbes; Scaling the technology; and Identifying the infrastructure needed to distribute the methane. The latter step is the most interesting to analyze. Any new technology faces a barrier to entry and a series of trade-offs regarding the benefits of adopting the technology versus the adaptations required for its use. Therefore, applications of new technologies that do not require much change to existing infrastructure are often the fastest to get to market.

In the Western world, the quickest application of the microbial fuel technology could be at the power plant. Microbial fuel could be used as a supplement to traditionally sourced natural gas used at natural gas power plants, or it could run alongside a coal-fired power plant if carbon capture technology gets off the ground, producing methane as a byproduct. Under this scenario, microbial fuel could feed back into a natural gas power plant or transit down the same natural gas distribution lines already in place to reach businesses and homes.

In developing countries, where existing energy infrastructure is minimal, microbial fuel technology could begin to feed a new decentralized electric power system — one that relies on distributed power generators (small generators providing electricity for only a small number of consumers).

Outside of power generation, microbial fuel could be used in vehicles, but this scenario first has a large infrastructure hurdle to surmount. Typically, natural gas vehicles are primarily used as fleet vehicles — buses, heavy-duty trucks and government vehicles — because fleet owners can install their own natural gas fueling stations. However, some automobile manufacturers are beginning to offer natural gas-fueled personal cars that often have the ability to switch from gasoline to natural gas depending on fuel availability. This likely would be the first use of microbial natural gas directly in vehicles, as it would require less change to vehicle fueling infrastructure in the short to medium term. Another avenue for vehicle fuels is gas-to-liquid technology: Through a chemical reaction, microbial gas could be turned into a liquid, which could then be refined into a product similar to gasoline. This avenue would not require much change in fueling infrastructure or in automobile design. If microbial fuel goes down the personal car fuel track, it could not only change the natural gas landscape but also begin to make a dent in global oil demand, because transportation is a large percentage of that demand.

This new technology still has a long way to go until it can actually begin to affect demand at natural gas behemoths such as Russia’s Gazprom; in fact, it might not even be possible. However, the idea that a country can begin making its own natural gas without being naturally endowed with geologic natural gas deposits begins to shift geopolitics in a way that does not happen very often. For instance, Japan is a top natural gas importer, and as such is always concerned about future energy security and global price fluctuations. And Turkmenistan’s economy, for example, is heavily dependent on its natural gas export revenue. In this respect, technological advancements — especially those linked to energy — become an important factor in monitoring the world’s geopolitical balance.

y BRENDA GOODMANPublished: March 11, 2008MOUNDVILLE, Ala. — After residents of the Riverbend Farms subdivision noticed that an oily, fetid substance had begun fouling the Black Warrior River, which runs through their backyards, Mark Storey, a retired petroleum plant worker, hopped into his boat to follow it upstream to its source.

Skip to next paragraph Enlarge This Image

Dana Mixer for The New York TimesNelson Brooke, the executive director of Black Warrior Riverkeeper, walked along an area of the river near Moundville, Ala.

Enlarge This Image

Nelson BrookeOil and grease from a biodiesel plant had been released. It turned out to be an old chemical factory that had been converted into Alabama’s first biodiesel plant, a refinery that intended to turn soybean oil into earth-friendly fuel.

“I’m all for the plant,” Mr. Storey said. “But I was really amazed that a plant like that would produce anything that could get into the river without taking the necessary precautions.”

But the oily sheen on the water returned again and again, and a laboratory analysis of a sample taken in March 2007 revealed that the ribbon of oil and grease being released by the plant — it resembled Italian salad dressing — was 450 times higher than permit levels typically allow, and that it had drifted at least two miles downstream.

The spills, at the Alabama Biodiesel Corporation plant outside this city about 17 miles from Tuscaloosa, are similar to others that have come from biofuel plants in the Midwest. The discharges, which can be hazardous to birds and fish, have many people scratching their heads over the seeming incongruity of pollution from an industry that sells products with the promise of blue skies and clear streams.

Iowa leads the nation in biofuel production, with 42 ethanol and biodiesel refineries in production and 18 more plants under construction, according to the Renewable Fuels Association. In the summer of 2006, a Cargill biodiesel plant in Iowa Falls improperly disposed of 135,000 gallons of liquid oil and grease, which ran into a stream killing hundreds of fish.

According to the National Biodiesel Board, a trade group, biodiesel is nontoxic, biodegradable and suitable for sensitive environments, but scientists say that position understates its potential environmental impact.

“They’re really considered nontoxic, as you would expect,” said Bruce P. Hollebone, a researcher with Environment Canada in Ottawa and one of the world’s leading experts on the environmental impact of vegetable oil and glycerin spills.

“You can eat the stuff, after all,” Mr. Hollebone said. “But as with most organic materials, oil and glycerin deplete the oxygen content of water very quickly, and that will suffocate fish and other organisms. And for birds, a vegetable oil spill is just as deadly as a crude oil spill.”

Other states have also felt the impact.

Leanne Tippett Mosby, a deputy division director of environmental quality for the Missouri Department of Natural Resources, said she was warned a year ago by colleagues in other states that biodiesel producers were dumping glycerin, the main byproduct of biodiesel production, contaminated with methanol, another waste product that is classified as hazardous.

Glycerin, an alcohol that is normally nontoxic, can be sold for secondary uses, but it must be cleaned first, a process that is expensive and complicated. Expanded production of biodiesel has flooded the market with excess glycerin, making it less cost-effective to clean and sell.

Ms. Tippett Mosby did not have to wait long to see the problem. In October, an anonymous caller reported that a tanker truck was dumping milky white goop into Belle Fountain Ditch, one of the many man-made channels that drain Missouri’s Bootheel region. That substance turned out to be glycerin from a biodiesel plant.

In January, a grand jury indicted a Missouri businessman in the discharge, which killed at least 25,000 fish and wiped out the population of fat pocketbook mussels, an endangered species.

Back in Alabama, Nelson Brooke of Black Warrior Riverkeeper, a nonprofit organization dedicated to protecting and restoring the Black Warrior River and its tributaries, received a report in September 2006 of a fish kill that stretched 20 miles downstream from Moundville. Even though Mr. Brooke said he found oil in the water around the dead fish, the state Department of Environmental Management determined that natural, seasonal changes in oxygen levels in the water could have been the culprit. The agency did not charge Alabama Biodiesel.

In August, Black Warrior Riverkeeper, in a complaint filed in Federal District Court, documented at least 24 occasions when oil was spotted in the water near the plant.==============

Page 2 of 2)

Richard Campo, vice president of Alabama Biodiesel, did not respond to requests for an interview, but Clay A. Tindal, a Tuscaloosa lawyer representing the refinery, called the suit’s claims “sheer speculation, conjecture, and unsupported bald allegations.” Mr. Tindal said that “for various reasons,” the plant was not now producing fuel.

The company has filed a motion to dismiss the complaint on the ground that it has entered into a settlement agreement with state officials that requires it to pay a $12,370 fine and to obtain proper discharge permits.

Don Scott, an engineer for the National Biodiesel Board, acknowledges that some producers have had problems complying with environmental rules but says those violations have been infrequent in an industry that nearly doubled in size in one year, to 160 plants in the United States at the end of 2007 from 90 plants at the end of 2006.

Mr. Scott said that the board had been working with state and environmental agencies to educate member companies and that the troubles were “growing pains.”

Ms. Lynch said some of the violations were the result of an industry that was inexperienced in the manufacturing process and its wastes. But in other instances, she said, companies are skirting the permit process to get their plants up and running faster.

In October 2005, the Alabama Department of Environmental Management informed Alabama Biodiesel that it would need an individual pollution discharge permit to operate, but the company never applied for one. The company operated for more than a year without a permit and without facing any penalties from state regulators, though inspectors documented unpermitted discharges on two occasions.

For some, the troubles of the industry seem to outweigh its benefits.

“They’re environmental Jimmy Swaggarts, in my opinion,” said Representative Brian P. Bilbray, Republican of California, who spoke out against the $18 billion energy package recently passed by Congress that provides tax credits for biofuels. “What is being sold as green fuel just doesn’t pencil out.”

SALT LAKE CITY - Troy Anderson was at the gas pump and couldn't have been happier, filling up at a rate of $5 per tank.ADVERTISEMENT

Anderson was paying 63.8 cents per gallon equivalent for compressed natural gas, making Utah a hot market for vehicles that run on the fuel.

It's the country's cheapest rate for compressed gas, according to the Natural Gas Vehicle Coalition, and far less than the $3.56 national average price for a gallon of gasoline.

"I'm totally celebrating," crowed Anderson, a 44-year-old social worker, who picked up a used Honda Civic GX two months ago. "This is the greatest thing. I can't believe more people aren't talking about it. This is practically free."

Personal ownership of natural gas-fueled vehicles in Utah soared from practically nothing a few years ago to an estimated 5,000 vehicles today, overwhelming a growing refueling network, where compressors sometimes can't maintain enough pressure to fill tanks completely for every customer.

"Nobody expected this kind of growth. We got caught by the demand," said Gordon Larsen, a supervisor at Utah utility Questar Gas.

Utah has 91 stations, including 20 open to the public, mostly in the Salt Lake City area. The others are reserved for commercial drivers, such as school districts, bus fleets and big businesses such as a Coca-Cola distributor.

It's possible to drive the interstates between Rock Springs, Wyo., and St. George, Utah — a distance of 477 miles — and find 22 places to pull off and fill up.

California has more stations but prices are much higher there, the equivalent of $2.50 a gallon for gasoline.

"Utah has the cheapest prices by a big margin," said Richard Kolodziej, president of the Natural Gas Vehicle Coalition, whose members include utilities, Honda Motor Co., environmental groups and transit agencies.

Among major utilities outside of Alaska, Questar is the country's cheapest provider of natural gas for home use. It can offer compressed natural gas for cars even cheaper because of a federal tax credit.

The incentives don't stop there. Buyers of new and some used and converted vehicles can claim their own federal and state tax credits totaling up to $7,000 — nearly the extra cost of a CNG-fueled vehicle.

Utah Gov. Jon Huntsman, a Republican, paid $12,000 of his own money to modify a state-owned Chevrolet Suburban last June.

"Converting to CNG gives us an opportunity to promote energy security and support a clean-burning alternative," Huntsman said in an e-mail Thursday. "Plus, who can beat running a Suburban on 63 cents a gallon?"

Mike Gaffa, a 39-year-old Continental Airlines reservation clerk, bought a used Ford F-150 pickup for $10,500. The vehicle came with a bonus: a previous owner added three extra tanks that fill the bed of his pickup.

"I don't even keep track of gasoline prices anymore," Gaffa boasted. "You'd be hard-pressed to find another vehicle that can go 600 miles on a fill-up."

And when he runs out of natural gas, he can switch over to a regular gasoline tank for a total range of more than 850 miles.

Utah has caught the attention of Honda, which can't make CNG-equipped Civic GXs fast enough at an Ohio plant. For now, it makes the compact available for sale to individuals only in California and New York, but executives say Utah could be next on their list.

Aside from fleet sales, no other automaker offers a CNG-powered car in the U.S.

Most Utah buyers must turn to the used-car market. They are tracking down vehicles on the Internet, some made earlier by the Detroit automakers. Some dealers here are hauling used CNG vehicles to Utah by the truckload.

"The demand in Utah is huge," Kolodziej said. "It's sucking all the used vehicles from around the country."

I recall reading this 10 years ago. In fact I may have posted it on the old Gilder board as an "OT" thread Mr. Campbell predicted we were going to start having big problems before 2010 which, at the time, was sooner then most were thinking.I think the cyclical nature of the availibility of oil is still in play but that we are in the top of the cycle until we start extracting more from the oil sands in Canada and other places like from the very deep ocean deposits being discovered off of Brazil, and the Arctic circle.

This Scientific article in its foretelling is like the Scientific American article that foretold that a Hurricane in New Orleans has the potential to be the biggest natural US disaster. Scientific A was right on again!

THE END OF CHEAP OIL

by Colin J. Campbell and Jean H. Laherrère,Scientific American, March 1998(This article is available in a PDF format almost identical to the original)wpe1.jpg (34570 bytes)Derricks bristling above the Los Angeles basin.

In 1973 and 1979 a pair of sudden price increases rudely awakened the industrial world to its dependence on cheap crude oil. Prices first tripled in response to an Arab embargo and then nearly doubled again when Iran dethroned its Shah, sending the major economies sputtering into recession. Many analysts warned that these crises proved that the world would soon run out of oil. Yet they were wrong.

Their dire predictions were emotional and political reactions; even at the time, oil experts knew that they had no scientific basis. Just a few years earlier oil explorers had discovered enormous new oil provinces on the north slope of Alaska and below the North Sea off the coast of Europe. By 1973 the world had consumed, according to many experts’ best estimates, only about one eighth of its endowment of readily accessible crude oil (so-called conventional oil). The five Middle Eastern members of the Organization of Petroleum Exporting Countries (OPEC) were able to hike prices not because oil was growing scarce but because they had managed to corner 36 percent of the market. Later, when demand sagged, and the flow of fresh Alaskan and North Sea oil weakened OPEC’s economic stranglehold, prices collapsed.

The next oil crunch will not be so temporary. Our analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand. This conclusion contradicts the picture one gets from oil industry reports, which boasted of 1,020 billion barrels of oil (Gbo) in "Proved" reserves at the start of 1998. Dividing that figure by the current production rate of about 23.6 Gbo a year might suggest that crude oil could remain plentiful and cheap for 43 more years—probably longer, because official charts show reserves growing.

Unfortunately, this appraisal makes three critical errors. First, it relies on distorted estimates of reserves. A second mistake is to pretend that production will remain constant. Third and most important, conventional wisdom erroneously assumes that the last bucket of oil can be pumped from the ground just as quickly as the barrels of oil gushing from wells today. In fact, the rate at which any well—or any country—can produce oil always rises to a maximum and then, when about half the oil is gone, begins falling gradually back to zero.

From an economic perspective, when the world runs completely out of oil is thus not directly relevant: what matters is when production begins to taper off. Beyond that point, prices will rise unless demand declines commensurately.

Using several different techniques to estimate the current reserves of conventional oil and the amount still left to be discovered, we conclude that the decline will begin before 2010.wpe2.jpg (24866 bytes)

FLOW OF OIL starts to fall from any large region when about half the crude is gone. Adding the output of fields of various sizes and ages (green curves above) usually yields a bell-shaped production curve for the region as a whole. M. King Hubbert, a geologist with Shell Oil, exploited this fact in 1956 to predict correctly that oil from the lower 48 American states would peak around 1969.

We have spent most of our careers exploring for oil, studying reserve figures and estimating the amount of oil left to discover, first while employed at major oil companies and later as independent consultants. Over the years, we have come to appreciate that the relevant statistics are far more complicated than they first appear.

Consider, for example, three vital numbers needed to project future oil production. The first is the tally of how much oil has been extracted to date, a figure known as cumulative production. The second is an estimate of reserves, the amount that companies can pump out of known oil fields before having to abandon them. Finally, one must have an educated guess at the quantity of conventional oil that remains to be discovered and exploited. Together they add up to ultimate recovery, the total number of barrels that will have been extracted when production ceases many decades from now.

The obvious way to gather these numbers is to look them up in any of several publications. That approach works well enough for cumulative production statistics because companies meter the oil as it flows from their wells. The record of production is not perfect (for example, the two billion barrels of Kuwaiti oil wastefully burned by Iraq in 1991 is usually not included in official statistics), but errors are relatively easy to spot and rectify. Most experts agree that the industry had removed just over 800 Gbo from the earth at the end of 1997.

Getting good estimates of reserves is much harder, however. Almost all the publicly available statistics are taken from surveys conducted by the Oil and Gas Journal and World Oil. Each year these two trade journals query oil firms and governments around the world. They then publish whatever production and reserve numbers they receive but are not able to verify them.

The results, which are often accepted uncritically, contain systematic errors. For one, many of the reported figures are unrealistic. Estimating reserves is an inexact science to begin with, so petroleum engineers assign a probability to their assessments. For example, if, as geologists estimate, there is a 90 percent chance that the Oseberg field in Norway contains 700 million barrels of recoverable oil but only a 10 percent chance that it will yield 2,500 million more barrels, then the lower figure should be cited as the so-called P90 estimate (P90 for "probability 90 percent") and the higher as the P10 reserves.

In practice, companies and countries are often deliberately vague about the likelihood of the reserves they report, preferring instead to publicize whichever figure, within a P10 to P90 range, best suits them. Exaggerated estimates can, for instance, raise the price of an oil company’s stock.wpe5.jpg (20529 bytes)

SUSPICIOUS JUMP in reserves reported by six OPEC members added 300 billion barrels of oil to official reserve tallies yet followed no major discovery of new fields.

The members of OPEC have faced an even greater temptation to inflate their reports because the higher their reserves, the more oil they are allowed to export. National companies, which have exclusive oil rights in the main OPEC countries, need not (and do not) release detailed statistics on each field that could be used to verify the country’s total reserves. There is thus good reason to suspect that when, during the late 1980s, six of the 11 OPEC nations increased their reserve figures by colossal amounts, ranging from 42 to 197 percent, they did so only to boost their export quotas.

Previous OPEC estimates, inherited from private companies before governments took them over, had probably been conservative, P90 numbers. So some upward revision was warranted. But no major new discoveries or technological breakthroughs justified the addition of a staggering 287 Gbo. That increase is more than all the oil ever discovered in the U.S.—plus 40 percent. Non-OPEC countries, of course, are not above fudging their numbers either: 59 nations stated in 1997 that their reserves were unchanged from 1996. Because reserves naturally drop as old fields are drained and jump when new fields are discovered, perfectly stable numbers year after year are implausible.wpe3.jpg (53494 bytes)

GLOBAL PRODUCTION OF OIL both conventional and unconventional (red), recovered after falling in 1973 and 11979. But a more permanent decline is less than 10 years away, according to the authors’ model, based in part on multiple Hubbert curves (lighter lines). U.S. and Canadian oil (brown) topped out in 1972; production in the former Soviet Union (yellow) has fallen 45 percent since 1987. A crest in the oil produced outside the Persian Gulf region (purple) now appears imminent.

Another source of systematic error in the commonly accepted statistics is that the definition of reserves varies widely from region to region. In the U.S., the Securities and Exchange Commission allows companies to call reserves "proved" only if the oil lies near a producing well and there is "reasonable certainty" that it can be recovered profitably at current oil prices, using existing technology. So a proved reserve estimate in the U.S. is roughly equal to a P90 estimate.

Regulators in most other countries do not enforce particular oil-reserve definitions. For many years, the former Soviet countries have routinely released wildly optimistic figures—essentially P10 reserves. Yet analysts have often misinterpreted these as estimates of "proved" reserves. World Oil reckoned reserves in the former Soviet Union amounted to 190 Gbo in 1996, whereas the Oil and Gas Journal put the number at 57 Gbo. This large discrepancy shows just how elastic these numbers can be.

Using only P90 estimates is not the answer, because adding what is 90 percent likely for each field, as is done in the U.S., does not in fact yield what is 90 percent likely for a country or the entire planet. On the contrary, summing many P90 reserve estimates always understates the amount of proved oil in a region. The only correct way to total up reserve numbers is to add the mean, or average, estimates of oil in each field. In practice, the median estimate, often called "proved and probable," or P50 reserves, is more widely used and is good enough. The P50 value is the number of barrels of oil that are as likely as not to come out of a well during its lifetime, assuming prices remain within a limited range. Errors in P50 estimates tend to cancel one another out.

We were able to work around many of the problems plaguing estimates of conventional reserves by using a large body of statistics maintained by Petroconsultants in Geneva. This information, assembled over 40 years from myriad sources, covers some 18,000 oil fields worldwide. It, too, contains some dubious reports, but we did our best to correct these sporadic errors.

According to our calculations, the world had at the end of 1996 approximately 850 Gbo of conventional oil in P50 reserves—substantially less than the 1,019 Gbo reported in the Oil and Gas Journal and the 1,160 Gbo estimated by World Oil. The difference is actually greater than it appears because our value represents the amount most likely to come out of known oil fields, whereas the larger number is supposedly a cautious estimate of proved reserves.

For the purposes of calculating when oil production will crest, even more critical than the size of the world’s reserves is the size of ultimate recovery—all the cheap oil there is to be had. In order to estimate that, we need to know whether, and how fast, reserves are moving up or down. It is here that the official statistics become dangerously misleading.wpe4.jpg (23180 bytes)

GROWTH IN OIL RESERVES since 1980 is an illusion caused by belated corrections to oil-field estimates. Backdating the revisions to the year in which the fields were discovered reveals that reserves have been failing because of a steady decline in newfound oil (blue).

According to most accounts, world oil reserves have marched steadily upward over the past 20 years. Extending that apparent trend into the future, one could easily conclude, as the U.S. Energy Information Administration has, that oil production will continue to rise unhindered for decades to come, increasing almost two thirds by 2020.

Such growth is an illusion. About 80 percent of the oil produced today flows from fields that were found before 1973, and the great majority of them are declining. In the 1990s oil companies have discovered an average of seven Gbo a year; last year they drained more than three times as much. Yet official figures indicated that proved reserves did not fall by 16 Gbo, as one would expect rather they expanded by 11 Gbo. One reason is that several dozen governments opted not to report declines in their reserves, perhaps to enhance their political cachet and their ability to obtain loans. A more important cause of the expansion lies in revisions: oil companies replaced earlier estimates of the reserves left in many fields with higher numbers. For most purposes, such amendments are harmless, but they seriously distort forecasts extrapolated from published reports.

To judge accurately how much oil explorers will uncover in the future, one has to backdate every revision to the year in which the field was first discovered—not to the year in which a company or country corrected an earlier estimate. Doing so reveals that global discovery peaked in the early 1960s and has been falling steadily ever since. By extending the trend to zero, we can make a good guess at how much oil the industry will ultimately find.

We have used other methods to estimate the ultimate recovery of conventional oil for each country [see box on next two pages], and we calculate that the oil industry will be able to recover only about another 1,000 billion barrels of conventional oil. This number, though great, is little more than the 800 billion barrels that have already been extracted.

It is important to realize that spending more money on oil exploration will not change this situation. After the price of crude hit all-time highs in the early 1980s, explorers developed new technology for finding and recovering oil, and they scoured the world for new fields. They found few: the discovery rate continued its decline uninterrupted. There is only so much crude oil in the world, and the industry has found about 90 percent of it.

Predicting when oil production will stop rising is relatively straightforward once one has a good estimate of how much oil there is left to produce. We simply apply a refinement of a technique first published in 1956 by M. King Hubbert. Hubbert observed that in any large region, unrestrained extraction of a finite resource rises along a bellshaped curve that peaks when about half the resource is gone. To demonstrate his theory, Hubbert fitted a bell curve to production statistics and projected that crude oil production in the lower 48 U.S. states would rise for 13 more years, then crest in 1969, give or take a year. He was right: production peaked in 1970 and has continued to follow Hubbert curves with only minor deviations. The flow of oil from several other regions, such as the former Soviet Union and the collection of all oil producers outside the Middle East, also follows Hubbert curves quite faithfully.

The global picture is more complicated, because the Middle East members of OPEC deliberately reined back their oil exports in the 1970s, while other nations continued producing at full capacity. Our analysis reveals that a number of the largest producers, including Norway and the U.K., will reach their peaks around the turn of the millennium unless they sharply curtail production. By 2002 or so the world will rely on Middle East nations, particularly five near the Persian Gulf (Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates), to fill in the gap between dwindling supply and growing demand. But once approximately 900 Gbo have been consumed, production must soon begin to fall. Barring a global recession, it seems most likely that world production of conventional oil will peak during the first decade of the 21st century.

Perhaps surprisingly, that prediction does not shift much even if our estimates are a few hundred billion barrels high or low. Craig Bond Hatfield of the University of Toledo, for example, has conducted his own analysis based on a 1991 estimate by the U.S. Geological Survey of 1,550 Gbo remaining—55 percent higher than our figure. Yet he similarly concludes that the world will hit maximum oil production within the next 15 years. John D. Edwards of the University of Colorado published last August one of the most optimistic recent estimates of oil remaining: 2,036 Gbo. (Edwards concedes that the industry has only a 5 percent chance of attaining that very high goal.) Even so, his calculations suggest that conventional oil will top out in 2020.

Factors other than major economic changes could speed or delay the point at which oil production begins to decline. Three in particular have often led economists and academic geologists to dismiss concerns about future oil production with naive optimism.

First, some argue, huge deposits of oil may lie undetected in far-off corners of the globe. In fact, that is very unlikely. Exploration has pushed the frontiers back so far that only extremely deep water and polar regions remain to be fully tested, and even their prospects are now reasonably well understood. Theoretical advances in geochemistry and geophysics have made it possible to map productive and prospective fields with impressive accuracy. As a result, large tracts can be condemned as barren. Much of the deepwater realm, for example, has been shown to be absolutely nonprospective for geologic reasons.

What about the much touted Caspian Sea deposits? Our models project that oil production from that region will grow until around 2010. We agree with analysts at the USGS World Oil Assessment program and elsewhere who rank the total resources there as roughly equivalent to those of the North Sea that is, perhaps 50 Gbo but certainly not several hundreds of billions as sometimes reported in the media.

A second common rejoinder is that new technologies have steadily increased the fraction of oil that can be recovered from fields in a basin—the so-called recovery factor. In the 1960s oil companies assumed as a rule of thumb that only 30 percent of the oil in a field was typically recoverable; now they bank on an average of 40 or 50 percent. That progress will continue and will extend global reserves for many years to come, the argument runs.

Of course, advanced technologies will buy a bit more time before production starts to fall [see "Oil Production in the 21st Century," by Roger N. Anderson, on page 86]. But most of the apparent improvement in recovery factors is an artifact of reporting. As oil fields grow old, their owners often deploy newer technology to slow their decline. The falloff also allows engineers to gauge the size of the field more accurately and to correct previous underestimation—in particular P90 estimates that by definition were 90 percent likely to be exceeded.

Another reason not to pin too much hope on better recovery is that oil companies routinely count on technological progress when they compute their reserve estimates. In truth, advanced technologies can offer little help in draining the largest basins of oil, those onshore in the Middle East where the oil needs no assistance to gush from the ground.

Last, economists like to point out that the world contains enormous caches of unconventional oil that can substitute for crude oil as soon as the price rises high enough to make them profitable. There is no question that the resources are ample: the Orinoco oil belt in Venezuela has been assessed to contain a staggering 1.2 trillion barrels of the sludge known as heavy oil. Tar sands and shale deposits in Canada and the former Soviet Union may contain the equivalent of more than 300 billion barrels of oil [see "Mining for Oil," by Richard L. George, on page 84]. Theoretically, these unconventional oil reserves could quench the world’s thirst for liquid fuels as conventional oil passes its prime. But the industry will be hard-pressed for the time and money needed to ramp up production of unconventional oil quickly enough

Such substitutes for crude oil might also exact a high environmental price. Tar sands typically emerge from strip mines. Extracting oil from these sands and shales creates air pollution. The Orinoco sludge contains heavy metals and sulfur that must be removed. So governments may restrict these industries from growing as fast as they could. In view of these potential obstacles, our skeptical estimate is that only 700 Gbo will be produced from unconventional reserves over the next 60 years.

Meanwhile global demand for oil is currently rising at more than 2 percent a year. Since 1985, energy use is up about 30 percent in Latin America, 40 percent in Africa and 50 percent in Asia. The Energy Information Administration forecasts that worldwide demand for oil will increase 60 percent (to about 40 Gbo a year) by 2020.

The switch from growth to decline in oil production will thus almost certainly create economic and political tension. Unless alternatives to crude oil quickly prove themselves, the market share of the OPEC states in the Middle East will rise rapidly. Within two years, these nations’ share of the global oil business will pass 30 percent, nearing the level reached during the oil-price shocks of the 1970s. By 2010 their share will quite probably hit 50 percent.

The world could thus see radical increases in oil prices. That alone might be sufficient to curb demand, flattening production for perhaps 10 years. (Demand fell more than 10 percent after the 1979 shock and took 17 years to recover.) But by 2010 or so, many Middle Eastern nations will themselves be past the midpoint. World production will then have to fall.

With sufficient preparation, however, the transition to the post-oil economy need not be traumatic. If advanced methods of producing liquid fuels from natural gas can be made profitable and scaled up quickly, gas could become the next source of transportation fuel [see "Liquid Fuels from Natural Gas," by Safaa A. Fouda, on page 92]. Safer nuclear power, cheaper renewable energy, and oil conservation programs could all help postpone the inevitable decline of conventional oil.

Countries should begin planning and investing now. In November a panel of energy experts appointed by President Bill Clinton strongly urged the administration to increase funding for energy research by $1 billion over the next five years. That is a small step in the right direction, one that must be followed by giant leaps from the private sector.

The world is not running out of oil—at least not yet. What our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend.How Much Oil is Left to Find?

We combined several techniques to conclude that about 1,000 billion barrels of conventional oil remain to be produced. First, we extrapolated published production figures for older oil fields that have begun to decline. The Thistle field off the coast of Britain, for example, will yield about 420 million barrels (a). Second, we plotted the amount of oil discovered so far in some regions against the cumulative number of exploratory wells drilled there. Because larger fields tend to be found first-they are simply too large to miss-the curve rises rapidly and then flattens, eventually reaching a theoretical maximum: for Africa, 192 Gbo. But the time and cost of exploration impose a more practical limit of perhaps 165 Gbo (b). Third, we analyzed the distribution of oil-field sizes in the Gulf of Mexico and other provinces. Ranked according to size and then graphed on a logarithmic scale, the fields tend to fall along a parabola that grows predictably over time (c). (Interestingly, galaxies, urban populations and other natural agglomerations also seem to fall along such parabolas.) Finally, we checked our estimates by matching our projections for oil production in large areas, such as the world outside the Persian Gulf region, to the rise and fall of oil discovery in those places decades earlier (d).-C.J.C. and J.H.LThe Authors

COLIN J. CAMPBELL and JEAN H. LAHERRÈRE have each worked in the oil industry for more than 40 years. After completing his Ph.D. in geology at the University of Oxford, Campbell worked for Texaco as an exploration geologist and then at Amoco as chief geologist for Ecuador. His decade-long study of global oil-production trends has led to two books and numerous papers. Laherrère’s early work on seismic refraction surveys contributed to the discovery of Africa’s largest oil field. At Total, a French oil company, he supervised exploration techniques worldwide. Both Campbell and Laherrère are currently associated with Petroconsultants in Geneva.

Moving GM's post from another thread to here:============Symposium: Energy Independence and the Terror War By Jamie GlazovFrontPageMagazine.com | Friday, May 02, 2008What is the best way for us to achieve energy independence? What is the urgency for us to do so in terms of our conflict with Islamo-Fascism? To discuss this issue with us today, Frontpage Symposium has assembled a distinguished panel. Our guests are:

Robert “Bud” McFarlane, Ronald Reagan’s National Security Advisor. Currently, he serves as Chairman and CEO of McFarlane Associates Inc., developing energy projects in third world countries and working to develop alternative fuels so as to reduce US reliance on foreign oil.

Robert Zubrin, the president of Pioneer Astronautics and also president of the Mars Society. For many years he worked as a senior engineer for Lockheed Martin. In addition, he is the author of the critically acclaimed nonfiction books The Case for Mars, Entering Space, Mars on Earth; the science fiction novels The Holy Land and First Landing; and articles in Scientific American, The New Atlantis, The New York Times, The Washington Post, Mechanical Engineering, and The American Enterprise. He has appeared on major media including CNN, CSPAN, the BBC, the Discovery Channel, NBC, ABC, and NPR. He is the author of the new book, Energy Victory: Winning the War on Terror by Breaking Free of Oil.

Gal Luft, one of America 's most influential energy independence advocates. He is executive director of the Institute for the Analysis of Global Security (IAGS) a Washington based energy policy think tank and co-founder of the Set America Free Coalition, an alliance of national security, environmental, labor and religious groups promoting ways to reduce America's dependence on foreign oil. He specializes in strategy, geopolitics, terrorism, energy security and economic warfare.

Anne Korin, Chair of Set America Free Coalition.

and

Daveed Gartenstein-Ross, the vice president of research at the Foundation for Defense of Democracies and the author of My Year Inside Radical Islam, which documents his time working for the extremist Al Haramain Islamic Foundation.

Zubrin: I'm glad you used the words "energy security," not "energy independence." While admittedly, being energy independent would be an improvement on our current position, it is not good enough, because if the oil cartel still controlled the world market, they could still collapse our economy by collapsing that of our allies and trading partners like Japan and Europe, and they would still be harvesting trillions that they could use to finance jihad and the takeover of our corporations and media organizations.

So even if it were possible, walling ourselves in a defensive "energy independent" position would not suffice. Rather, we have to take the offensive and destroy the power of the oil cartel internationally. The key to doing that is to destroy the vertical monopoly that they have on the world's vehicle fuel supplies. The US Congress could strike a devastating blow in this direction simply by passing a law requiring that all new cars sold in the United States be flex fueled -- that is able to run on any combination of gasoline, methanol, or ethanol. Such cars are existing technology and only cost about $100 more than the same vehicle in non-flex fuel form.

If such a law were passed, it would make flex fuel the international standard for cars, as not only the Detroit Big 3, but all the foreign manufacturers would shift their lines over immediately in response. This would put 50 million cars on the road in the USA within 3 years capable of running on alcohol fuels, and hundreds of millions more worldwide. With such a market available, alcohol production and distribution facilities would multiply rapidly, and gasoline would be forced to compete at the pump against alcohol fuels produced in any number of ways from any number of sources everywhere in the world. (Methanol, for example, can be produced from any kind of biomass, without exception, as well as from coal, natural gas, and recycled urban trash. There are many starchy or sweet crops that can be used to make ethanol, with cellulosic options increasingly viable as well.)

This opening of the fuel market would put a permanent constraint on OPEC's ability to raise fuel prices. Instead of being able to raise oil prices to $200/barrel, which they are already discussing, prices would be forced back down to $50/barrel, because that is where alcohol fuels become competitive. Then, once such an alcohol fuel infrastructure is well in place, we can proceed to roll the oil cartel right off the map by instituting tax and tariff policies that favor alcohols over petroleum. That's how we beat the Islamists.

If we don't do that, with our current imports of 5 billion barrels per year, they will use a $100/barrel price to tax us $500 billion per year (and rob the world at a rate of $1.2 trillion/year). The NY Times today had a front page article quoting leading economists as saying that this huge tax (more than triple the size of the current economic stimulus treasury give-back) is grinding our economy into recession. So it is, but it is worse than that. If they are allowed to keep taxing us in this way, they will use that enormous monetary power to not only massively grow their jihadi movement, but to take over most of the major corporations and media organizations in the US, Europe, and Japan within a decade.

So not only our economy, but our independence is at stake. We need to break the oil cartel, and forceful action to create fuel choice internationally is the way to do it.

Luft: I share Robert's sense of urgency about reducing the strategic value of oil by opening the transportation sector to healthy competition, and fuel flexibility should indeed be the first item on our agenda. There is no reason why the $100 addition which allows cars to burn alcohol should not be - just like seat belts, air bags or rear view mirrors - a standard feature in every car sold worldwide. This would be a low premium insurance policy against future supply disruptions and a Band-Aid to stop the bleeding of our economy. But flex fuel alone would not be sufficient to solve our energy problem. In the U.S. today we use annually roughly 140 billion gallons of gasoline and additional 60 billion gallons of petroleum diesel. We simply don't have the resource base to replace all of this with alcohol and bio-diesel, even if we tapped into our vast coal reserves and diverted all of our food crops into fuel production. So we need solutions beyond liquid fuels.

In order to achieve significant petroleum displacement we must begin to electrify the transportation sector by speeding the commercialization of plug-in hybrids and fully electric cars. Unlike in the 1970s, today only 2 percent of our electricity is made from oil. Almost all of our electricity is made from domestic energy resources like coal, nuclear power, natural gas and hydro. In other words, on the electricity front, unlike the Europeans who rely on imported natural gas for their light and heating, Americans are already energy independent. Using electrons for transportation, instead of gasoline, essentially means shifting from an imported resource which poses a national security threat to an array of abundant domestic energy sources. In addition, electricity is cheaper and cleaner than gasoline. It costs about 3 cents per mile to run a car on electricity--roughly one fifth of the cost of driving the same mile on gasoline. This cost differential protects us from a counterattack by OPEC.

The oil cartel will surely respond to the emerging alcohol economy by dropping crude prices to a level that would make ethanol and methanol economically unatractive. This is exactly what they did in the 1980s in response to a massive effort by Western countries to wean themselves from oil. Oil dropped to $8 a barrel and alternative fuels producers lost their shirts. If cars had full fuel flexibility, allowing them, in addition to burning alcohols, to also tap into the grid, OPEC would have to drop prices to $5 a barrel to compete with 3 cents per mile of electric drive. This is way below where they can afford to go considering their youth bulges and domestic economic conditions. This is why the commercialization of plug in hybrid electric vehicles, which allow us to drive the first chunk of our daily driving on electricity after which the car begins to burn liquid fuel, is so critical. Congress should therefore provide tax incentives to early adopters of plug in hubrids--just as it did in the case of regular hybrids--while facilitating the emergence of a viable battery industry in the U.S. A flex fuel plug-in hybrid will run approximately 500 miles on a gallon of gasoline. This could really pull the plug on OPEC.

Korin: The goal is indeed independence, not in the sense of autarky (not importing any oil) but in the sense of regaining ability to act independently, without need to kowtow or defer to petrodictators chief among them the Saudi royal family, a family which controls a quarter of the world's oil reserves and essentially all swing capacity on the global oil market (the mafia never had it so good.) To regain our independence we must strip oil of its strategic value. Salt presents a compelling historical parallel. Salt was once a strategic commodity, control of which determined geopolitical power and ability to sway world affairs. With the advent of electricity and refrigeration salt lost its strategic status as it was no longer the only option for preserving meat. Oil's strategic value derives from its domination of the transportation sector, which in turn accounts for two thirds of oil consumption - as Gal noted, we essentially no longer use oil to generate electricity (an inconvenient fact that renders bizarre the protestations of many politicians that solar, wind, or nuclear can reduce oil demand.)

Stripping oil of its strategic value will require fuel competition in the transportation sector. Flexible fuel vehicles, as Robert noted, provide a platform on which fuels can compete. For a very modest premium, they enable a driver to choose amongst a variety of liquid fuels, made from a variety of feedstocks, from coal to agricultural material. It costs 50 cents a gallon to make methanol from coal. Methanol has about half the energy of gasoline, so that's one dollar per gasoline equivalent gallon. The US is the Saudi Arabia of coal. China and India also have a lot of coal, and indeed China is rapidly expanding its coal to methanol capacity.

We need to remove the ridiculous 54 cent a gallon import tariff on sugarcane ethanol - we don't tax oil imports, so why are we taxing imports of an alternative fuel? It's not because of the oil industry, it's because of corn ethanol protectionists who'd rather be big fish in a small pond than open the dam and turn the pond into a sea. As Gal notes, it is also critical to get electricity into the transportation fuel market. Flex fuel plug in hybrids will mean the Saudis will need to figure out how to monetize sand. Perhaps they can learn to blow glass.

Gartenstein-Ross: I am of the opinion that energy security is the most pressing challenge we face. It should be the top issue in the current presidential campaigns because our oil dependence is without a doubt our Achilles’ heel, yet no candidate has been seriously pushing the issue. This comes on top of the systemic failure of our political leaders, including the Bush administration and the presidential administrations that preceded it, to curtail our dangerous dependence on oil. (Interestingly, the one real exception was the Carter administration’s Fuel Use Act, which is a major reason that, as Luft and Korin note, only 2 percent of our electricity comes from oil today.) Energy security has a cognizable impact on virtually all the other major issues that our country now faces.

There is the economy. Today, more than three out of four Americans believe that the country is in recession—and it is not difficult to recognize that high energy prices are a primary driver. Oil prices have more than doubled in the past fifteen months, rising from around $50 a barrel in early 2007 to about $110 a barrel today. Such a dramatic rise in energy prices will of course harm the U.S. economy. As Zubrin stated, this equates to a $500 billion per year tax on the U.S. economy, affecting all sectors. We depend on long supply lines to transport agriculture to consumers, as well as the vast majority of products that you can buy off store shelves. All prices—the price of food, the price of consumer goods—are pushed upward by the rising price of oil.

There is terrorism and our international political adversaries. One distinctive characteristic of Islamic terror movements is that they explicitly find religious sanction for their actions. Their interpretation obviously is not shared by all Muslims, as the world would look much different if we were at war with over a billion people. What helps extremist interpretations of Islam gain a foothold? One clear answer is petrodollars. Numerous analysts have connected radicalization in various regions to extremist charities, mosques, and madrasas funded by oil money. Some of the charities funded by petro-dollars are “dual-use,” not only propagating an extreme interpretation of Islam but also directly funding terrorist groups. Venezuelan president Hugo Chavez famously declared in his opening address to an OPEC conference in 2006 that “the American empire will be destroyed.” Do we want to be dependent on political leaders like that because of their oil resources?

The Bush administration has had more than seven years to steer the country’s energy policy, yet its combined policies amount to slapping a few Band-Aids on a hemorrhaging wound. (This is of course not just the Bush administration’s fault: as a country, we have had more than forty years to address this issue since the dangers of our oil dependence became crystal clear.) For example, the primary strategy of the Energy Independence and Security Act of 2007 is a new national mandatory fuel economy standard that, in President Bush’s words, “will save billions of gallons of gasoline.” But as Zubrin shows in his commendable book Energy Victory, conservation-based strategies are not, and will not be, sufficient. If we could duplicate the technical success that Corporate Average Fuel Efficiency (CAFE) standards achieved from 1975 through 1990, Zubrin writes, we would not cut our oil consumption at all. Instead, it would reduce our expected rate of increase of oil usage by only 2.2 million barrels a day, during a period when the world as a whole is likely to raise its consumption another 30 million barrels per day. Whatever demand we eliminate would be replaced fifteen times over.

President Bush has also congratulated himself on the ethanol policies that his administration has undertaken, but they are a far cry from the large market for ethanol that Zubrin’s policy recommendations would spur. (By Bush’s account, we produced 6.4 billion gallons of ethanol in 2007 versus the approximately 200 billion gallons of gasoline and petroleum diesel that we use annually.)

But fortunately, while our oil dependence is currently causing great harm, I don’t think the immediate solutions are mysterious. I agree strongly with the recommendations put forward by Zubrin and Luft in this symposium. Fuel flexibility should be the first major policy we push for because it provides immediate relief from this grave problem, but we should also move toward electrification of the transportation sector. The bottom line is that we are worse off, and our enemies in a better position, for each day that action is delayed.

McFarlane: As the panel has made clear, we have the means at hand to overcome the vulnerability of our economy and the challenge to our very way of life that is posed by our reliance on foreign oil. It starts with mandating that all cars and trucks sold in the US be flex-fuel, and then that we accelerate the production of plug-in hybrid-electric and all-electric cars and trucks, and that we build them out of carbon composite materials as Boeing is doing today in its new 787 Dreamliner.

We cannot consider this as nice-to-have, P-C, green "someday" matter. This is a matter of grave urgency. Today if an attack on any of a dozen very vulnerable Saudi oil processing facilities were successful, we would be facing oil at $200/barrel overnight. That would lead within weeks (not months) to the collapse of the Japanese economy, and before long to those of our European allies and ultimately of our own.

And even if such an attack does not occur, consider the price we are paying for our reliance on foreign oil. Last year we spent over $300 billion on foreign oil. Think for a moment of what $300 billion could buy in terms of better schools, health care, highways and bridges, law enforcement, a partial solution to our sub-prime mortgage problems, and a dozen other domestic priorities. But that's just the beginning.

Think about the half trillion dollars we spend every year -- yes, 'trillion' every year -- on the defense budget, and that doesn't count the supplemental appropriations for the war in Iraq. At least $200 of that $500 billion pays for forces that are deployed in the Middle East or to protect lines of communication between here and there and to our allies in Europe and Japan. Add it up -- $500 billion for defense, another $300 billion to pay for foreign oil, and with the price now above $100/bbl, the total from now on will be at least 1 trillion every year -- yes every year -- until we start changing our ways.

Of course the foregoing costs are just the financial dimension. Far more important are the costs in human lives, families shattered by separation, and the loss of loved ones. This is truly an intolerable condition -- one that is all the more unconscionable considering that we have the means at hand to overcome it.

Zubrin: I would like to make an additional point. As bad as $100 per barrel oil is for us, it is much worse for the poorer nations of the world. It is one thing to pay $100 per barrel for oil when you live in a country where the average person makes $40,000 per year. It is quite another if you live in a country where the average person makes $1,000 per year. To many third world countries, particularly in Africa, the effects of OPEC looting are not merely recessionary, but genocidal. Indeed, the jacked up oil price is nothing else than a huge regressive tax levied by the world’s richest people on the world’s poorest people.

Consider this: This year, Saudi Arabia’s high-priced oil business will reap that nation’s rulers over $300 billion. Much of this bounty will be wasted on a wild assortment of narcissistic luxuries. The rest go towards funding of network of over twenty thousand Wahhabi madrassas worldwide. There, millions of young boys will be instructed that the way to salvation is to kill Christians, Jews, Buddhists, animists, and Hindus, all as part of a global campaign to create reactionary theocratic states that totally degrade women and deny all political, religious, intellectual, scientific, artistic, or personal freedom to everyone.

Simultaneously, Kenya, a nation whose population of 36 million is half again as great as that of Saudi Arabia, will scrape up around $3 billion in export earnings, and use these funds to buy badly needed fuel, farm machinery, and replacement parts for equipment. (Kenya, incidentally, is not one of the world’s fifty poorest nations. There are many others much worse off.)

Distributed elsewhere, the loot garnered by the Saudi terror bankers could triple the foreign exchange of 50 counties comparable to Kenya. Distributed elsewhere, the $1.3 trillion per year taxed out of the world economy by the all the OPEC tyrannies could lift the entire third world out of poverty.

By shifting to alcohol fuels, we can shift a very substantial amount of capital flows in precisely such a direction. Many third world countries are tropical nations with very high agricultural potential. Within a few years of the establishment of a flex fuel mandate, we will have a much larger domestic market for agricultural produce to make ethanol than American farmers can deliver to. That is a very GOOD thing. It means that we will be able to give them all the business they can handle, and still have market share left over, which we could open to Latin American and Caribbean ethanol, but dropping the current tariff. So countries like Haiti, which desperately needs an export income source, will be able to get it by growing sugar ethanol for export to the USA. In the same way, Europe would be able to drop its agricultural trade barriers, and open itself up to ethanol exported from Africa, and Japan likewise from south Asia. Effectively, we would be able to redirect about a trillion dollars a year that is now going to OPEC and send it to the global agricultural sector instead, with about half going to advanced sector farmers and half going to the third world. This would create an enormous engine for world development.

Ethanol has been criticized by certain opponents who have alleged that its production from corn takes away from the food supply, and that large irrigation requirements draw power that exceeds that provided by the ethanol. Such analyses, however, are false. When ethanol is made from corn, all of the protein in the corn is preserved for use as animal feeds, and virtually no ethanol corn grown in the USA is irrigated. In fact, for the expenditure of a given amount of petroleum, nearly ten times as much ethanol can be produced as gasoline.

World food prices have been rising recently, at a rate of 4 percent a year, and oil cartel propaganda organs have been quick to place the blame on bio-fuel programs. But these are false accusations. Despite the corn ethanol program, US corn exports have not declined at all in recent years, and our overall agricultural exports this year are up over 23 percent. So its not corn ethanol that is driving up global food prices, including those for fish, fruit, and every kind of crop. Rather it is high fuel costs, which have risen 40 percent over the past year due to vicious OPEC price rigging. Not only that, these high fuel costs are driving up the cost of not just food, but nearly every product that needs to be transported anywhere in the world. And again, the hardest hit victims are the world's poor.

Luft: Since we all seem to agree that fuel flexibility in our cars is the lowest hanging fruit, let's talk about how to make this happen. In the past two sessions of Congress there was strong bipartisan support in both the Senate and the House for flex fuel legislation. More than 30 senators from Sam Brownback on the right to Ted Kennedy on the left co-sponsored a bill including a requirement that at least 50 percent of new cars be flex fuel.

Presidential candidates are also in agreement. Both Barack Obama's and John McCain's energy platform include strong flex fuel provisions. Obama campaign pledged that an Obama Administration would ensure that all new vehicles have FFV capability by the end of his first term in office.

Less clear is how the automakers would respond. While it is true that the Big Three previously pledged to make 50 percent of their cars flex fuel by 2012, no industry likes to be told what to do and we should not expect the automakers, to embrace a full mandate without a fight, particularly after their recent defeat in the battle over mandatory fuel efficiency standards. (The Big Three also resisted other mandated low cost features like seat belts and airbags.) The Japanese automakers who don't have experience with this technology are likely to be even less enthusiastic.

But considering the low cost of fuel flexibility and the simplicity of retooling the production lines, this is certainly something they can live with.

So it’s basically in the hands of Nancy Pelosi and Harry Reid to make this vision of fuel choice come true. Instead of complaining about the "insane" profits of oil companies the Democratic leadership in Congress could serve America best by pushing a flex fuel legislation and bringing it to a vote before the elections.

It is important to ensure that the legislation doesn't enable automakers to get away with making E-85 cars that can only accommodate ethanol. True fuel flexibility is one that enables all alcohols to compete. The cars should therefore be warranted to run on both ethanol and methanol. With such legislation presented before the Senate all three senators who are running for president would be forced to endorse it, which means that the next president would be on board.

Extra $100 per car is less than the price of one barrel of oil, and equipping every car in the US with the feature would cost roughly $20 billion over the next two decades, much less than what the Fed forked over one weekend to save Bear Sterns. The same Congress that spent billions on regulating an open standard for high definition TV should be able to give us an open fuel standard for our cars.

Korin: The Arab oil embargo in the Seventies led to massive Japanese automaker entry into the US market. While US automakers were building huge cars, the Japanese had the more efficient vehicles that appealed to consumers at a time of high gas prices. Today, other competitors waits in the wings should US autos stall on the road to fuel choice. Not so long ago a Chinese automaker showed an under $10,000 family sedan at the Detroit auto show. Take that car, make it a flex fuel plug in hybrid, and you have an under $20,000 fuel choice enabling family sedan. Coming soon to a Walmart near you.

The Chinese are not waiting for us to move toward alcohol fuels or electrification of transportation. We can lead the train or we can run after it, and absent the policies discussed above and summarized below, the latter is more likely every day.

To summarize, the three key policies for breaking oil's monopoly in the transportation sector, the sector from which oil's strategic value is derived, are: an Open Fuel Standard so most new cars sold in the US will be gasoline-ethanol-methanol FFVs; repeal of the 54 cent a gallon tariff on ethanol imports; consumer tax credits for plug in hybrids (this is the policy that helped hybrids move past the early adopter hump.)

Gartenstein-Ross: There is broad agreement on this panel about the significance of the energy security problem that we face, as well as the steps that the government needs to take to address this critical issue; thus, I will keep my remarks atypically short. I offer an apology to Jamie if he’s disappointed that this symposium lacks the fireworks of some of the previous symposia in which I have participated—but I don’t think that’s a terribly bad thing in this case, since energy security is an issue where acting in the near-term is more important than lengthy debate.

I will follow Luft’s suggestion that we discuss how to make the fuel flexibility mandate happen. I agree with him that automakers are likely to fight against a full mandate, and also think it likely that iterations of this legislation will be offered that involve E-85 cars rather than true fuel flexibility. So it is critical to ensure that any legislation on fuel flexibility that is signed into law not be watered down through the legislative process or subjected to the kind of bureaucratic capture that too frequently occurs in this country. I know that a large number of conservative activists read FPM (although I do not see energy security as an issue that should break along partisan lines). Informed members of the public should serve as energy security watchdogs, demanding of our politicians the full implementation of policies necessary to counter our dangerous dependence on foreign oil.

McFarlane: Gal and Anne often make the point that we ought to be realistic politically in structuring our approach to new legislation -- as is required to mandate Flex-Fuel vehicles. It does not good to be doctrinaire -- and lose. Or as President Reagan once told me, "Bud, if you go over the cliff, flags flying, you still go over the cliff." Specifically it does no good to take on the major oil companies. Indeed our point is not anti-oil, we will need oil for a long time and it is in all our interests for American oil companies to produce as much oil as they can for as long as they can.

Rather, our approach to the public and to members of both parties ought to be cast in terms of the political, economic and security costs of doing nothing -- losses which are measured in trillions of dollars, thousands of lives, and the gradual control of American industries by foreign sovereigns.

We must also stress that the global war against Islamism -- especially as its financial support grows in proportion to oil revenues flowing to the Persian Gulf -- will someday go nuclear. Unless we get serious toward moving our four-part agenda, we may run out of time.

Jamie Glazov is Frontpage Magazine's managing editor. He holds a Ph.D. in History with a specialty in U.S. and Canadian foreign policy. He edited and wrote the introduction to David Horowitz’s Left Illusions. He is also the co-editor (with David Horowitz) of The Hate America Left and the author of Canadian Policy Toward Khrushchev’s Soviet Union (McGill-Queens University Press, 2002) and 15 Tips on How to be a Good Leftist. To see his previous symposiums, interviews and articles Click Here. Email him at jglazov@rogers.com.

Worth a careful read: Khosla is a legendary Silicon Valley VC who has shifted his focus to alternate energy. Dummy he ain't. Investors take note – he is a premier builder of valuations, especially for IPO's (surprise, surprise). This guy knows how to make money. His web site has a lot of interesting papers and presentations which I am now reviewing. Have a look at:

Storing solar energy in batteries remains costly and inefficient. But that may not be true for much longer.

MIT researchers have discovered a way to store solar energy that could make solar power in homes a mainstream energy option and might even make power companies obsolete, at least for residential needs.

Daniel Nocera, a professor of chemistry and energy at MIT, and postdoctoral fellow Matthew Kanan have figured out how to split water into hydrogen and oxygen cheaply and efficiently at room temperature. The process can later be reversed, allowing the recombination of hydrogen and oxygen in a fuel cell to create carbon-free electricity.

"This is the nirvana of what we've been talking about for years," Nocera told the MIT News Service. "Solar power has always been a limited, far-off solution. Now we can seriously think about solar power as unlimited and soon."

Nocera's breakthrough could enable the "hydrogen economy," a possibility that many have dismissed as impractical.

Nocera told the MIT News Service that within 10 years, he expects that homeowners will be able to use solar power to provide electricity during the day and to store unused solar energy to power a household fuel cell for evening use. This would eliminate the need for electricity delivered over power lines.

According to the MIT News Service, James Barber, a professor of biochemistry at Imperial College in London, characterized the research by Nocera and Kanan as "a major discovery with enormous implications for the future prosperity of humankind."

I haven't encountered a second source yet, but if this is so it's big news with more backstory to emerge.

The death of OPECPosted Sep 11 2008, 07:01 AM by Douglas McIntyre Rating: Saudi Arabia walked out on OPEC yesterday, saying it would not honor the cartel's production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.

As the world's largest crude exporter, the kingdom in the desert took its ball and went home.

As the Saudis left the building, the message was shockingly clear. “Saudi Arabia will meet the market’s demand,” a senior OPEC delegate told the New York Times. “We will see what the market requires and we will not leave a customer without oil."

OPEC will still have lavish meetings and a nifty headquarters in Vienna, Austria, but the Saudis have made certain the the organization has lost its teeth. Even though the cartel argued that the sudden drop in crude was due to "oversupply", OPEC's most powerful member knows that the drop may only be temporary. Cold weather later this year could put pressure on prices. So could a decision by Russia that it wants to "punish" the U.S. and European Union for a time. That political battle is only at its beginning.

The downward pressure on oil got a second hand. Brazil has confirmed another huge oil deposit to add to one it discovered off-shore earlier this year. The first field uncovered by Petrobras has the promise of being one of the largest in the world. The breadth of that deposit has now expanded.

OPEC needs the Saudis to have any credibility in terms of pricing, supply, and the ongoing success of its bully pulpit. By failing to keep its most critical member, it forfeits its leverage.

OPEC has made no announcement about any possibility of dissolving, but the process is already over.

The international thermonuclear experimental reactor (ITER) is a highly ambitious project that is intended to remove the last obstacles between civilization and our very own pet suns. During the last year, I have become, and continue to be, peripherally (very peripherally) involved in ITER. It is a huge project and, as yet, my involvement has been limited to attending scientific discussions and writing proposals associated with a side project. Nevertheless, I have gained some feeling for the challenges facing ITER, and I thought it might be interesting to share those with Ars readers.

The consequences of confinement First let's look at what appears to be solved: magnetic confinement of the plasma. None of the graduate students, post-docs, or senior scientists discuss the confinement system except in passing. The impression from these meetings is that this was largely a solved problem on paper, and ITER would really test how well these solutions worked. To put it more succinctly, experimentalists do not have the necessary tokomak to test the physics further than they already have, and theory says it should work. The theorists may be wrong and, if they are, ITER will provide the perfect testbed to get it right.

The design of the physical geometry and the parameters of the plasma-wall interactions were dictated by the requirements of the confinement system. In as much as the walls were considered at all, it was to the extent of whether they would survive long enough to complete the experiment. This has led to a huge scientific challenge—how to make the walls resistant to immense plasma flows.

Magnetic confinement has leaks wherever the field terminates. It is impossible to design a field without these leaks, so the structure of any magnetic confinement system must take this into account. The solution used with ITER is to have specific walls where the field terminates, which confines the leaks to a well-known area. These walls will be subject to a huge flows of very hot plasma that will lead to both surface etching and ions implanting themselves deep into the wall material.

That leads to two further problems: how do we get rid of the dust? And how do we deal with the contaminated wall panels? ITER will eventually use tritium (a radioactive form of hydrogen) as the fuel for the reaction. Some of the tritium will end up embedded in the walls and in the dust. The radioactivity levels are expected to be such that the cleaning will have to be done remotely, and the walls will be quite radioactive when the material needs to be changed.

This is a huge technical challenge that can probably be dealt with. Unfortunately, even though tritium has a relatively short half-life, it rather destroys the idea that fusion is a clean technology. It will certainly be cleaner than coal-fired and fission-powered reactors, but it is certainly not going to be as green as fusion power is generally viewed. This, of course, can change because it is not essential to use tritium—tritium is the easiest to get ignited, so ITER will use that—so future reactors could be much greener than ITER. But, as I will discuss a bit later, it is still a big problem.

Clearly, even if ITER is a complete success in terms of fusion, the plasma-wall interaction problem may yet remain unsolved. It is still not clear what wall material will work best in ITER—indeed, there may not be a best choice for ITER (just a least-bad choice).

To help sort this out, a testbed for the plasma-wall interaction has been built. Even this presented a serious challenge, because the amount of plasma hitting the wall in ITER is expected to be huge. A pilot facility has been operating for some time, but at temperatures and plasma flows significantly lower than those expected from ITER. In 2007, scientists finally succeeded in generating ITER-like conditions in a plasma source, so the construction of the main test facility is now underway. Nevertheless, it is becoming pretty clear that future fusion reactors are going to have to place a higher priority on plasma-wall interaction than on the magnetic confinement configuration.

Paying the price One of the problems faced by all big science projects like ITER is planning. Scientific experiments by their very nature have a lot of unknowns, making it difficult to forecast costs; even making design decisions can be problematic. For instance, absolutely every observation port planned for ITER is already reserved for certain instruments. This is a necessity but, particularly with the plasma-wall interaction, there is a lot to be discovered—and a lot being discovered—meaning that it is very difficult to determine the best instrumentation choices.

To make matters worse, it costs money every time an instrument is changed. One of the past year's big stories described how ITER project leaders were going back to contributing governments to present a final bill that would be much more than expected. This is, in large part, due to the fact that no one knows what wall material to use or how to monitor those walls. To cope with this problem, ITER has been redesigned so that it will be possible to change the materials used in the walls.

The thing is, none of these sorts of problems are different from those faced by any other big science project. So, why has ITER languished? When we look at big science projects—the LHC springs to mind—they are sold on their ability to succeed. The LHC and neutrino observatories will discover new physics; it is simply impossible for them not to because they are looking at things we have not looked at before. Large banks of sequencing machines and huge databases will lead to biological breakthroughs, because it is simply impossible to gather that much new information and not learn something new.

But ITER doesn't fit in this mold. It is unlikely to discover any fundamentally new physics. It certainly won't generate power. It will generate some radioactive waste. It might even lead us to the conclusion that fusion power is not economic. In a sense, it is designed to fail—a power station that uses power—but to fail in such a way that we learn enough to succeed. Unfortunately, governments see the price tag, the "if" statements that go with every science experiment, the lack of certainty... and go weak at the knees. Imagine dropping a few billion on a project, only to have a completely null result—something that is simply not possible for most large science projects because they are instruments.

Scale is really the difference between fusion power and all other alternative energy sources. We cannot build a cheap, small-scale fusion reactor and draw conclusions about its feasibility. Instead, a very large reactor needs to be constructed simply to see if it works. Risk-averse governments see that a price of failure that is very much less if one invests in solar energy, wind power, or tidal power, meaning that ITER gets the short shrift.

My personal opinion is mixed. I really don't know if ITER would succeed. Nevertheless, energy demand has grown consistently at around three to five percent per year in almost every developed nation on Earth for as long as we have records. Even removing environmental considerations, it is unlikely that this demand simply can be met by current mature technologies. Given this, it is probably worth finding out if fusion research is worth it.

In fact, by my reckoning, we should fund ITER to the level requested by the scientists, in order to discover if it is ever going to be worth building fusion reactors. If it is, that is money well spent. If it isn't, you have a good reason to scale back fusion research for the foreseeable future and invest money elsewhere. This is probably a good deal cheaper than what we've done so far: partially fund smaller scale experiments for an indefinite period of time.

Companies are racing to find ways to recycle the water used in hydraulic fracturing, chasing an emerging market that could be worth billions of dollars.

From energy industry giants Halliburton Corp. HAL +3.25%and Schlumberger Ltd. SLB +1.69%to smaller outfits such as Ecologix Environmental Systems LLC, companies are pursing technologies to reuse the "frack water" that comes out of wells after hydraulic fracturing, or "fracking"—the process of using highly pressured water and chemicals to coax oil and gas out of shale-rock formations.

While the recycled water can't currently be cleaned up enough for drinking or growing crops, it can be cleaned of chemicals and rock debris and reused to frack additional wells, which could sharply cut the costs that energy companies face securing and disposing of water.

Some companies are finding it is still cheaper in many parts of the U.S. to inject the wastewater deep underground instead of cleaning it, which has slowed adoption of recycling technology. But experts say that is likely to change as fracking grows.

At Schlumberger, which predicts that a million new wells will be fracked around the world between now and 2035, reducing freshwater use "is no longer just an environmental issue—it has to be an issue of strategic importance," Salvador Ayala, vice president of well-production services, told a recent conference.

Though fracking has brought U.S. oil production to its highest level in more than 14 years and produced a glut of natural gas, it requires huge amounts of water, raising costs for energy companies and spurring opposition from environmental groups at a time when some states are suffering through droughts.

It takes between 70 billion to 140 billion gallons of water to frack 35,000 wells a year, the industry's current pace, according to a 2011 report by the Environmental Protection Agency. That is about the same amount consumed every year by Chicago or Houston—and the price tag for securing that much water can be substantial.

In North Dakota's Bakken Shale, one of the current fracking hot spots, fresh water delivered to a drilling site costs between 10 and 14 cents per gallon, according to Continental Resources Inc., CLR +3.07%an Oklahoma City-based oil driller. Water alone can cost upward of $400,000 per fracturing attempt—and Continental plans more than 200 next year in North Dakota.

Energy companies are also struggling with how to get rid of the tainted water that comes out of fractured wells; the fluid, which contains a mix of chemicals and salts, must be taken to a licensed disposal facility.

Companies are researching moving away from using water entirely to fracture rock, with efforts aimed at using propane gel and even compressed air. Moving away from liquids entirely, however, is still several years away—if early laboratory work can be successfully applied in the field.

While the cost of getting rid of the millions of gallons varies from state to state, it can be substantial. In Texas, where there are plenty of emptied-out oil fields, companies can often inject the water into spent wells, which are generally older conventional wells that have been converted to accept oil-field wastewater.

But in places such as Pennsylvania, companies have to haul the water hundreds of miles to the nearest injection wells. Injection wells pump the untreated oil-field liquids deep underground into porous rock formations for permanent disposal. There are less than 10 working injection wells in Pennsylvania, so most of its wastewater is carried by trucks into Ohio.

These injection wells are controversial after being linked by some scientists and state officials to minor earthquakes. The injected liquids are essentially thought to lubricate faults and accelerate movement that causes tremors. Ohio only recently began issuing permits for new injection wells, after imposing rules to prevent tremors.

In the Northeast, oil companies have to pay up to $8 per 42-gallon barrel to contractors to haul wastewater for disposal elsewhere, said Jeanie Oudin, an analyst with energy consulting firm Wood Mackenzie. She said operators have reported recycling—which eliminates the cost of disposal and the cost of acquiring fresh water for fracking—can cut costs by as much as $2 per barrel in some areas when done on site, which could equate to a $200,000 savings over the lifetime of a typical well.

"It's a multibillion-dollar business that someone is going to capture and reap the benefits of," Ms. Oudin said of the sector and its potential annual size.

Chesapeake Energy Corp. CHK +3.07%has begun recycling 100% of the water it retrieves from wells in northern Pennsylvania. In addition to cutting the company's costs, recycling reduces the number of trucks on the road ferrying clean water to drilling sites, a sore point for local residents, said spokesman Michael Kehs.

After a well is fracked, contractors typically clean the water that flows back out of the well by filtering it or adding a chemical that attracts small solid particles, making it easier to remove these contaminants. Some companies treat water at the well, while others bring it to a facility built nearby.

Fourteen percent of water used to frack a well in central Pennsylvania is now recycled, up from less than 1% two years ago, according to the Susquehanna River Basin Commission, which monitors water usage.

Clay Terry, strategic business manager of Halliburton's Water Solutions unit, said operators in areas such as Texas have been slow to embrace recycling, largely because using injection wells there is fairly inexpensive. But there are growing economic benefits to recycling water, he said, and political ones, too.

"As the political and regulatory environment continues to shift toward protecting and constraining the use of finite resources," he said, "the operating community will continue to move to alternative sources."

The interest in water recycling is creating opportunities for small companies such as Select Energy Services LLC, a closey held Houston firm that said it has had a rapid rise in demand for its water-recycling services. It currently has full-scale operations in four areas including North Dakota and Colorado, up from one at the end of last year, as more companies examine recycling frack water.

Ecologix, an Alpharetta, Ga., recycling company, claims its service can cost as much as 80% less than injecting wastewater into a disposal well. It is building new facilities in west Texas to purify 31,000 barrels a day of wastewater after having earlier sold all of its recycling units to Halliburton.

"Hopefully, we'll mend the dispute between environmentalists and oil companies by answering the wish list of both," said Chief Executive Eli Gruber.

A ConocoPhillips drill rig at Prudhoe Bay on Alaska's North Slope, seen in 2012, tested a method for extracting methane from methane hydrate.

Scientists in Japan and the U.S. say they are moving closer to tapping a new source of energy: methane hydrate, a crystalline form of natural gas found in Arctic permafrost and at the bottom of oceans.

At room temperature the crystal gives off intense heat, earning it the nickname of "fire in ice," and making the estimated 700,000 trillion cubic feet of the substance scattered around the world a potentially major fuel source, containing more energy than all previously discovered oil and gas combined, according to researchers at the U.S. Geological Survey.

Scientists in Japan and the U.S. say they are moving closer to tapping a new source of energy: methane hydrate, a crystalline form of natural gas found in Arctic permafrost and at the bottom of oceans. Ben Lefebvre joins MoneyBeat. Photo: AP.

Commercial production of methane hydrate is expected to take at least a decade—if it comes at all. Different technologies to harvest the gas are being tested, but so far no single approach has been perfected, and it remains prohibitively expensive. But booming energy demand in Asia, which is spurring gigantic projects to liquefy natural gas in Australia, Canada and Africa, is also giving momentum to efforts to mine the frozen clumps of methane hydrate mixed deep in seafloor sediment.

The biggest concern is that the sediment that contains methane hydrate is inherently unstable, meaning a drilling accident could set off a landslide that sends massive amounts of methane—a potent greenhouse gas—bubbling up through the ocean and into the atmosphere.

Oil and gas companies establishing deep-water drilling rigs normally look at avoiding methane-hydrate clusters, said Richard Charter, senior member of environmental group the Ocean Foundation, who has long studied methane hydrates.Read More

Critics See New Global-Warming Threat

Nevertheless, the government of Japan—where natural gas costs are currently $16 per million British thermal units, four times the level in the U.S.—has vowed to bring methane hydrate into the mainstream by 2023 after a successful drilling test in March.

In the government-sponsored test off of the southern coast of Japan's main island, Honshu, a drilling rig bored nearly 2,000 feet below the seafloor.

Special equipment reduced the pressure around the methane hydrate crystals, dissolving them into gas and water, and then pumped about 4.2 million cubic feet of gas to the surface. While not a huge haul, it was enough to convince Japanese researchers that more natural gas could be harvested.

If Japan can deliver on its vow to produce natural gas economically from the methane hydrate deposits off its shores, it could experience a natural-gas boom that matches the fracking-fueled one under way in North America, said Surya Rajan, analyst at IHS CERA.

"If you look at what a dramatic shift the North American gas industry has gone through, could you afford to bet against something similar happening in methane hydrate?" Mr. Rajan said.

Successful development of methane hydrates could throw a wrench into liquefied-natural-gas megaprojects such as Australia's $50 billion Gorgon development led by Chevron Corp., CVX -1.02% experts say.

"It would make me have pause about investing billions of dollars in an LNG export terminal," said Christopher Knittel, an energy economics professor at the Massachusetts Institute of Technology in Cambridge.

Not all observers think that the costs can come down enough to make methane hydrate viable. But plenty of countries, particularly in Asia, are planning to try. China plans to host an international conference on methane hydrate in 2014. India is contemplating a push to develop the vast quantities of methane hydrate discovered off its coast in the Indian Ocean in 2006, according to the U.S. Geological Survey, a part of the U.S. Department of Interior that conducts scientific research.

In the U.S., scientists explored the northern Gulf of Mexico in May to map some of the 6.7 quadrillion cubic feet of methane-hydrate clusters believed to be underwater there. The Consortium for Ocean Leadership, a nonprofit group of researchers, is now trying to convince the Department of Energy to lend it a research drilling ship to do more tests.

"There are a huge amount of people internationally working in this area," said Carolyn Ruppel, head of the gas hydrates project at the USGS. "A lot of national governments have gotten into the game."

The most optimal places to harvest methane hydrate are near where the continental shelf transitions to the deep ocean, areas difficult to access from sea level.

Would-be producers also have to be careful when harvesting fragile clusters of methane hydrate to ensure nearby crystals don't prematurely break and send greenhouse gases bubbling to the surface.

The cost of developing this new source of energy remains high, with estimates ranging from $30 to $60 per million British thermal units. In the U.S., natural gas currently trades for less than $4 per million BTUs, as the rise of fracking produced a gas glut.

But countries like Japan, Korea, India, and Taiwan import gas "at a high price and thus may find it economical to produce their own resources," said George Hirasaki, a professor at Rice University in Houston who has done research on methane hydrates.

Last year, ConocoPhillips worked with the DOE on a test run producing natural gas from methane hydrate in Alaska's North Slope, home to about 85 trillion cubic feet of technically recoverable methane hydrate, according to DOE statistics.

The company spent 13 days injecting carbon dioxide and nitrogen into methane-hydrate clusters in the permafrost. The chemical cocktail fractures the permafrost, allowing the gas to escape through the newly made fractures for collection.

ConocoPhillips was able "to safely extract a steady flow of natural gas," a spokeswoman said.

ConocoPhillips declined to say how much it has invested in methane-hydrate production. The Houston-based company said that "at present, the technology does not exist to produce natural gas economically from hydrates."

By Brendan Byrnes | More Articles | Save For Later August 31, 2013 | Comments (0)

Join Motley Fool analyst Brendan Byrnes for a conversation with Ian Scott, the executive vice president of Westport Innovations' On-Road Systems segment, which works with OEM partners such as Ford, Volvo, Kenworth, and Peterbilt to produce natural gas-0powered vehicles in the U.S. and elsewhere.

In the following video, Scott describes the progress being made in natural gas infrastructure among companies such as Clean Energy Fuels and Royal Dutch Shell, with as many as 560 stations projected to be in place by the end of 2015.

The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Brendan Byrnes: When you look at some of the big companies using natural gas vehicles -- Waste Management, UPS, FedEx -- UPS actually is going to increase their natural gas fleet to 800 by the end of 2014. That's up from 112 right now.

What do you think overall when you look at the landscape? What's the biggest barrier for companies embracing natural gas? Is it the infrastructure? Is it companies like these that need to come in and really take the lead and show that it's possible and the economics work? What do you think is the barrier?

Ian Scott: I think historically it's been infrastructure, has been the biggest one. But now we see -- and the UPS example is a great one -- we see where infrastructure is no longer an impediment. I think we're getting stronger infrastructure but we're not at critical mass yet, where we need to be in order to just see massive adoption of natural gas.

Companies such as Clean Energy and Shell and ENN, they're doing a great job in building out particularly liquid natural gas stations right now. I think that's really going to help.

Our product costs more. It costs more than a diesel or a gasoline product, so what you're doing is you're paying up-front capital cost, but more than making that back in the fuel savings. We have to do our job as well, in order to get the product cost down, and we're working aggressively to do that. That will come with volume, obviously, as well.

The stations are being built. We're going to sell more product. That will allow more stations to be built, and I think we're starting to see it really pick up right now.

Byrnes: Could you talk about infrastructure? We have America's natural gas highway being built out by Clean Energy. What's the improvement in infrastructure you've seen over a year or so, and where do you think this is going over the next couple of years?

Scott: It's amazing. We said in our recent Q-Call that, from announced LNG stations, we're looking at 560 by the end of 2015. The load that's available for trucking in particular is just tremendous.

We've seen other companies come in now; you mentioned Clean, but Shell just made a large announcement with respect to TravelCenters of America. We have -- ENN has made announcements, other companies are putting in fueling stations as well.

I think that we've gone from, "Is the infrastructure going to be built?" to "It's being built, being built rapidly, and now we need to continue to provide the products to the marketplace."

Brendan Byrnes has no position in any stocks mentioned. The Motley Fool recommends Clean Energy Fuels, FedEx, UPS, Waste Management, and Westport Innovations and owns shares of Waste Management and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

CCP, Great stuff, this is a big deal IMO. NG is at least 30% cleaner than gasoline and it is American-made or North American made if we can keep the fracking revolution alive. 50% of American homes already have a pipeline hooked up.

Also if we completed the Yucca Mountain facility and built new, clean, safe nuclear facilities in this country, our CO2 output would drop even further and become a model for the world. Environmentalists would have to find productive work - another boost for the economy.

I am wondering if Westport or Clean Energy could be decent investments. There is nothing unique about Westport I don't think and I wouldn't think gas stations are such a good investment although I haven't spent too much time researching this.

Some feel the nat gas producers are analogous to the bandwidth companies of the late go go late 90s. Global crossing (was great investment for George H Bush, Colin Powell, and Terry McCullife who is another Democrat who appears ready to win in Va. more because the Republicans do not have a good enough of a candidate to oppose him), JDSU (If only I sold at the top...like the CEO is retired just in time...if that wasn't a tipoff I didn't heed than I don't know what is - in retrospect), and LVLT (with few exceptions like QCOM - wireless).

OTOH if only we can get rid of Obama.....I can't believe we have 3 + yrs of him left. By the time he leaves the damage he and his onslaught legions in the government, media, university complex will have trampled this country to mediocrity.

http://www.nature.com/articles/nenergy201666The discovery of effective catalysts is an important step towards achieving Li–O2 batteries with long cycle life and high round-trip efficiency. Soluble-type catalysts or redox mediators (RMs) possess great advantages over conventional solid catalysts, generally exhibiting much higher efficiency. Here, we select a series of organic RM candidates as a model system to identify the key descriptor in determining the catalytic activities and stabilities in Li–O2 cells. It is revealed that the level of ionization energies, readily available parameters from a database of the molecules, can serve such a role when comparing with the formation energy of Li2O2 and the highest occupied molecular orbital energy of the electrolyte. It is demonstrated that they are critical in reducing the overpotential and improving the stability of Li–O2 cells, respectively. Accordingly, we propose a general principle for designing feasible catalysts and report a RM, dimethylphenazine, with a remarkably low overpotential and high stability.

A University of Texas at Dallas researcher has made a discovery that could open the door to cellphone and car batteries that last five times longer than current ones. Dr. Kyeongjae Cho, professor of materials science and engineering..has discovered new catalyst materials for lithium-air batteries that jumpstart efforts at expanding battery capacity. The research was published in Nature Energy. (above)

In 10 years, the energy use of "the cloud" has already surpassed all of aviation n the world, and the growth of it has hit tip of the iceberg level yet. The super data centers like google requires have amazing usage and growth. Google's usage is up 12-fold in the last 4 years. Hyperscale Data Centers: https://www.enterprisetech.com/2017/04/12/hyperscalers-emerging-hype-phase/ Wireless takes far more eneergy than wired. (Who knew?)

If the IT sector was a nation, it is already the 3rd largest user of energy behind China and the US.

This is second in a series. Maybe he will get to how (nuclear?) we need to produce this new energy requirement.